Party City has filed for Chapter 11 Bankruptcy, Retail Dive reports. The bankruptcy was filed in the U.S., and Canadian stores are safe. Phew!
“Chapter 11 includes a restructuring process, giving a business or individual time to get their financial affairs back in order.” Credit Counselling Society states.
Party City is a chain of stores selling various supplies for parties with 38 locations in Ontario.
The retailer secured provisional court permission to pay suppliers and other vendors considered critical to its operations and a request for authorization to spend $12.7 million to pay key domestic and international vendors, as well as lien holders and other trade creditors was requested to a federal bankruptcy judge.
In total, Party City is expected to pay $74 million to its critical vendors throughout the course of the bankruptcy.
One of the main concerns is to be able to continue without supply chain disruptions, as that would result in losing customers by not being able to fulfill their needs.
A final hearing on Party City’s critical vendor motion is scheduled for Feb. 14. Retail Dive reports.
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